As Russian
military assets continue to pick apart Ukraine, we should be thankful the transatlantic
community didn’t cash in its Cold War-era insurance policy. To extend the
metaphor, NATO’s political leaders have a lot of catch-up payments to make
before their policy is back to full strength.

Let’s start where most insurance policies start: risk.

The risks facing NATO are increasing. Vladimir Putin’s
Russia has dismembered Ukraine and Georgia, waged cyberwar against Estonia, reopenedmilitary
basesto bolster outsized Arctic claims,
violated the INF Treaty, and conducted provocative
war games on NATO’s borders. Russian incursions into NATO airspace tripledin 2014. Of particular concern to Canada and the
U.S., Moscow announcedin November it will deploy long-range bombers “to maintain military presence in
the western Atlantic and eastern Pacific, as well as the Caribbean and the Gulf
of Mexico.”

Putin’s apologists argue that Moscow is reacting to NATO’s
eastward expansion. However, NATO expands via consent and cooperation—not
coercion. And NATO, unlike Putin, never has annexed a country.

Although Putin’s military is a shell of the Red Army, Russia
has increased military spending108 percent since 2004, giving Putin
enough muscle to hold sway in his neighborhood. With parts of Ukraine, Moldova
and Georgia in Moscow’s grip, it’s not unthinkable that NATO members Latvia,
Estonia or Lithuania could be next. If Putin’s goal is to reclaim territory and
prestige Moscow lost when the USSR collapsed, then it stands to reason the
Baltics would be in his crosshairs. Sidelining NATO would be a means to that
end. Perhaps Abkhazia, Crimea and Donetsk are low-risk testing grounds for this
strategy.

Hoping to thwart that, NATO’s political leaders recently declared“continuing and unwavering commitment to defend the populations, territory,
sovereignty” of the alliance; agreed to form a rapid-response taskforce; authorized
deployment of military assets on a “rotational basis” in NATO’s east;
revived large-scale maneuvers; and called on members to spend two percent of GDP
on defence “within a decade.”

Putting these plans into practice requires more
than words. Too often, NATO’s words exceed its capabilities. In Kosovo,
Afghanistan and Libya, many allies were found lacking in precision munitions,
mid-air refueling planes, reconnaissance platforms, transport, and
command-and-control assets. Only the U.S. possesses these assets in the
quantity needed to conduct 21st-century military operations. That’s largely because
the U.S. accounts for 75 percent of NATO
military spending—up from 50 percent during the Cold War. Despite years
of begging by NATO headquarters, only the U.S., Britain, Greece and Estonia
meet the two-percent-of-GDP standard, with Canada, Germany and France falling
short. In fact, while Russia’s defence budget mushrooms, Italy’s has shrunk 26
percent, France’s 6.4 percent, Britain’s 2.5 percent.

“In more peaceful times, it was right to reduce defence
spending,” NATO Secretary General Jens Stoltenberg observes.
“But we do not live in peaceful times.”

Those who view government’s role as providing services might
argue defence spending diverts resources from social programs, while the more
market-minded might argue government is siphoning enough from the economy. Yet
no less an authority on economic behaviour than Adam Smith noted, “The first
duty of the sovereign, that of protecting the society from the violence and
invasion of other independent societies, can be performed only by means of a
military force.”

That requires investing in the common defence, which points
the way back to NATO’s core mission.

First, NATO must devote adequate resources to deterrence. To
borrow Smith’s language, NATO’s mission is protecting its members from invasion.
That’s why it was formed in 1949 and why it survived after 1989. Yet years of
underfunding have led to “alarming deficiencies in the state of NATO
preparedness,” according to the British government.

If NATO’s deterrence mission is to succeed today, each ally needs
to lift its defence budget to the two-percent standard—and sooner rather than later.
The geopolitical and military impact of the two-percent commitment is diluted
by the 10-year timeframe.

Second, NATO needs to defend the principle of sovereignty. Moscow
recently demandeda “100 percent guarantee” Ukraine will never join NATO. As a partnership of
sovereign states, NATO’s members have the right to determine NATO’s membership.
And as a sovereign European nation, Ukraine has a right to pursue membership.
It also has a right to
defend its borders, and NATO members have a right—arguably a responsibility—to send
more than nonlethal aid to help Kiev. Ottawa’s decision to provide “military
training and cooperation” points the way forward. As Ukrainian President Petro Poroshenko says, “One cannot win the
war with blankets.”

Third, NATO members also should wield non-military tools to
counter Putin. Russia’s economy, heavily dependent on energy exports, was
booming until energy prices cratered. Canada and the U.S. can extend this by
pumping more oil and natural gas into the global supply, defending their
resource-rich Arctic territories from Russian poaching and helping Europe cut
reliance on Russian natural gas. Several European ambassadors to the
U.S. have urged Washington to expedite liquefied natural gas exports
to Europe. Of course, that depends on greater U.S.
export-terminal capacity—and that depends on regulatory approval.

Finally, NATO needs to make its words matter. NATO’s decision to increase
rotational deployments in Eastern Europe is a half-step in the right
direction. But the best way to deter Putin is to base permanent
defensive assets where they are most needed: on the territory of NATO’s most-at-risk
members. Well-meaning observers argue that post-Cold War agreements prohibit this.
But as NATO noted during its 2014 summit, “Russia has breached its commitments”
to a range of post-Cold War treaties. There can be no treaty where only
one party observes its provisions.

Likewise, there can be no security without adequate
insurance, which brings us back to investing in the common defence. For NATO’s
members, it’s time to pay their insurance premiums.